Saturday, January 26, 2008

Nokia hits 40

Nokia has just hit over 40% global mobile phone market share in the last quarter as profit surged 44 percent on rising sales in China, Africa and the Middle East. The company, based in Espoo, Finland, said profit rose to 1.84 billion euros, or $2.7 billion, from 1.27 billion euros a year earlier as sales climbed 34 percent to 15.7 billion euros from 11.7 billion euros.

Shares in the Finnish company soared 14.6 per cent, supporting claims that Nokia’s performance can defy global economic weakness. Nokia’s growth has been driven by strong sales of cheaper phones to emerging markets such as India and China. Any consequent profit margin compression has been offset by volume gains.

Nokia had sold in the 4th quarter 77.8 million cellphones in Asia, the Middle East and Africa in the quarter, nearly double the 42.3 million sold in Europe and North America. In China, Nokia’s fastest-growing, high-volume market, the company sold 20.2 million phones, an increase of 38.4 percent over a year earlier.

Strategy Analytics, a research company, said yesterday Nokia’s 40 per cent fourth quarter market share was larger than the combined 35.6 per cent of its three largest rivals, Motorola, Samsung and Sony Ericsson.

While Nokia is grinning, Motorola, the US’s largest mobile phone maker, last year lost its position as the world’s second largest to Samsung and this week reported an 84 per cent drop in fourth quarter profit to $100m and forecast a loss in the current quarter.

A competitor to look out would be Samsung who has gained alot of traction and market share lately. Their fourth quarter profit from its telecoms business, which includes mobile phones, rose 67 per cent, fuelled by its range of aggressively priced products. Samsung is a serious competitor to be taken note as their products had for years be synonymous with reliability and good design. In some market they are leading Nokia in market share eg, France.

This is an impressive milestone for Nokia who had doubled its 20% market share back in 1997 to 40% in 2007. Nokia isnt going to slow down anytime as they had been aggressively for the past 2 years making several major acquisitions to become an internet company. Nokia believes the path is "beyond the device" and its this strategy that Nokia believes that they will continue to lead the market and ensuring a great user experience for its customers.

Its going to be interesting how this whole strategy will pan out over the next few years as the vision is great but more importantly are how those strategies will be executed. Not only Samsung and Sony Ericsson are chasing after Nokia, Nokia has to start including Google, Microsoft, Apple and other impressive startups to its radar.

Any thoughts out there whether Nokia will be able to move at internet speed? or you think Nokia is better off to focus on making great devices?

1 comment:

Charles Frith said...

I think all the dots are present for Nokia to move at internet speed although its a matter of getting them joined up. From the blogs to the beta apps there's pretty much everything the organisation needs although opening the process to allow the flexibility for those jots to make connections is another thing altogether. One only needs to ask what is Ovi or can you describe a widget to understand if Nokia is geared up for 2.0. Marketing as utility is the way forward but that 's a 21st century concept that isn't easy to grasp.

I understand there is a declining value in creating handsets from here on so it remains to be seen if the organisation can adapt. China is surely the best place in the world to build new models built around community and utility/sharing social media value creation! There ya go ;)